Chicago Mayor Rahm Emanuel Turns Down State Cash Advance For Schools

06/29/2015 02:52 pm ET
|
Updated
Jun 29, 2016

ASSOCIATED PRESS

CHICAGO, June 29 (Reuters) - Chicago Mayor Rahm Emanuel on Monday turned down an offer by Illinois Governor Bruce Rauner to advance a fiscal 2016 state payment to the city's cash-strapped school system to help make a pension payment.

"We appreciate the governor's gesture, but the use of this year's dollars to pay last year's pension payment follows the same path that got the schools into the current financial mess," said a statement from Emanuel's office.

It added that a "real solution" was needed so that pension payments for all Illinois school districts are treated the same way.

The Associated Press reported that the Illinois State Board of Education had identified $450 million in state grants due the Chicago Public Schools during fiscal 2016 that could be released this week.

The nation's third-largest public school system is facing a state-mandated $634 million payment to its teachers' pension fund on Tuesday. The Chicago Board of Education, which is appointed by the mayor, has approved a plan to privately place $200 million of tax anticipation notes with J.P. Morgan Securities and possibly use the proceeds for the pension payment.

Also, a bill to delay the pension payment for 40 days could come up for another vote in the Illinois House this week after failing to pass last week.